The Unique Nature of Medical Debt
Unlike credit card debt incurred from spending, medical debt is usually unexpected and entirely unpreventable. Fortunately, medical providers are vastly more flexible than standard banks when it comes to repayment.
Never Put Medical Debt on a Credit Card
Hospitals do not typically charge interest on unpaid bills. The moment you use a credit card to pay a hospital bill, you convert zero-interest debt into 25% APR debt. Instead, immediately contact the hospital's billing department and ask to establish a payment plan.
Negotiation and Charity Care
Most non-profit hospitals are legally required to offer Financial Assistance or "Charity Care" programs. Depending on your income relative to the federal poverty line, you could have your bill reduced by 50% to 100%. Furthermore, simply asking for an itemized bill often causes 'accidental' overcharges to mysteriously vanish.
New Credit Reporting Rules
Recent changes by the major credit bureaus offer some relief. Paid medical collections are no longer included on credit reports. Unpaid medical collections under $500 are also excluded, and medical debts won't appear on credit reports until a year after going to collections, giving you vital time to negotiate.